HomeMy WebLinkAbout10370
ORDINANCE NO. 10370
AN ORDINANCE APPROVING AN AIRPORT USE AND LEASE
AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL
CORPORATION, AND SOUTHERN AIRWAYS EXPRESS, LLC,
AND AUTHORIZING THE MAYOR TO EXECUTE SAME
WHEREAS, the City of Pueblo is the owner and operator of the Pueblo Memorial Airport
together with the land on which said Airport is situated; and
WHEREAS, Southern Airways Express, LLC, is desirous of leasing certain property for
the purpose of a commercial service airline operation, where said property is owned by the City
of Pueblo; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
A certain Airport Use and Lease Agreement (“Lease”), by and between the City of
Pueblo, a Municipal Corporation, and Southern Airways Express, LLC, a Limited Liability
Company, to lease space for a commercial service airline operation at the Pueblo Memorial
Airport, a copy of which is attached hereto and made a part hereof by reference, after having
been approved as to form by the City Attorney, is hereby approved.
SECTION 2.
The Mayor is hereby authorized to execute the Lease on behalf of the City of Pueblo,
and the City Clerk shall affix the Seal of the City thereto and attest same.
SECTION 3.
The officers and staff of the City are authorized to perform any and all acts consistent
with the intent of this Ordinance and the attached Lease to implement the terms and conditions
described therein.
SECTION 4.
This Ordinance shall become effective on the date of final action by the Mayor and City
Council.
Action by City Council:
Introduced and initial adoption of Ordinance by City Council on December 27, 2022.
Final adoption of Ordinance by City Council on January 9, 2023 .
President of City Council
Action by the Mayor:
☒ Approved on January 11, 2023 .
□ Disapproved on based on the following objections:
Mayor
Action by City Council After Disapproval by the Mayor:
□ Council did not act to override the Mayor's veto.
□ Ordinance re-adopted on a vote of , on
□ Council action on _______ failed to override the Mayor’s veto.
President of City Council
ATTEST
City Clerk
City Clerk's Office Item # R5
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: January 9, 2023
TO: President Heather Graham and Members of City Council
CC: Mayor Nicholas A. Gradisar
VIA: Marisa Stoller, City Clerk
FROM: Greg Pedroza, Director Aviation
SUBJECT: AN ORDINANCE APPROVING AN AIRPORT USE AND LEASE
AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL
CORPORATION, AND SOUTHERN AIRWAYS EXPRESS, LLC, AND
AUTHORIZING THE MAYOR TO EXECUTE SAME
SUMMARY:
An Airport Use and Lease Agreement between the City of Pueblo and Southern Airways
Express, LLC (Southern Airways), is attached for consideration. This agreement covers the use
of certain areas in the Airport Terminal building for providing passenger airline service at Pueblo
Memorial Airport.
PREVIOUS COUNCIL ACTION:
City Council approved this same type of agreement with SkyWest Airlines on November 13,
2017, to cover the previous U.S. Department of Transportation (USDOT) agreement term. This
Agreement with Southern Airways Express, LLC, will cover the new USDOT agreement term.
BACKGROUND:
Air service at the Pueblo Memorial Airport is under the Federal Essential Air Service (EAS)
program, which is managed by the USDOT. On July 5, 2022, the USDOT issued a request for
proposals from airlines to provide air service at Pueblo, CO for the term beginning January 1,
2023 and ending January 31, 2024. Only Southern Airways submitted a proposal. Based on
the sole submittal and with agreement from the community, the USDOT awarded the contract
for 2 years. SkyWest has been ordered to hold in place until January 8, 2023. The Agreement
between the City and Southern Airways is for the use of Airport facilities.
FINANCIAL IMPLICATIONS:
The revenue from this agreement will to be about $19,560.00 annually, as determined by the
following:
Southern Airways will pay the City $19,560.00 annually for exclusive use of counter
space, office space, and outbound baggage area. This is an increase from SkyWest’s
annual rent of $19,515.00.
The aircraft operated under the EAS contract will not generate landing fees because
they do not meet the maximum gross landing weight threshold set by Pueblo Municipal
Code.
Partial rent forgiveness is offered for the 2024 contract term if Southern Airways
enplanes more than 10,000 passengers through either regularly scheduled flights or
charter flights. The FAA considers airports that have less than 10,000 passengers
annually as a Nonprimary Commercial Service Airport rather than a Primary Service
Airport. Airports with more than 8,000 enplanements but fewer than 10,000 are eligible
for the $600,000 apportionment each fiscal year, whereas airports with over 10,000
enplanements qualify for $1,000,000 in funds. The rent forgiveness is incentivization to
reach the number of passengers which will qualify the Airport for the higher
apportionment of funds.
BOARD/COMMISSION RECOMMENDATION:
The Airport Advisory Committee is aware of the award from the USDOT and is in support of the
air carrier’s proposal as the only submittal.
STAKEHOLDER PROCESS:
There is no stakeholder process required.
ALTERNATIVES:
If this Resolution is not approved, Southern Airways would not be able to meet its obligation to
the USDOT and the City would have a commercial service provider.
RECOMMENDATION:
The Department of Aviation recommends the passage of this resolution.
ATTACHMENTS:
1. Southern Airways Express Lease - Final
PUEBLO MEMORIAL AIRPORT
AIRPORT USE AND LEASE AGREEMENT
THIS AIRPORT USE AND LEASE AGREEMENT("Lease"), is made and entered into this
91h day of January, 2023, by and between the City of Pueblo, a Municipal Corporation, with an
address of One City Hall Place, Pueblo, Colorado 81003, ("Lessor") and Southern Airways
Express, LLC, with an address of 2875 South Ocean Boulevard, Suite 201, Palm Beach, Florida
33480 ("Lessee").
WHEREAS, Lessor owns certain real property in the County of Pueblo, State of Colorado,
known as the Pueblo Memorial Airport ("Airport"), together with the land on which said Airport is
situated, and Lessee is engaged in the business of transporting persons, property, cargo, and
mail by air; and
WHEREAS, Lessor desires to grant the use of, and Lessee desires to use, certain
premises and facilities at the Airport, together with certain rights, licenses, and privileges thereon.
NOW, THEREFORE, Lessor does hereby grant unto Lessee for the purpose of conducting
its air transportation service business, and Lessee does take and accept from Lessor, for such
purpose, the use of certain premises and facilities, rights, licenses, services, and privileges in
connection with and on the Airport as follows.
AIRPORT USE AND LEASE.
A. Airport.
Lessor grants to Lessee the non-exclusive use of the common areas of the Airport and its
appurtenances including, if available and functioning, but not limited to, landing field,
runways, aprons, taxiways, roadways, sewer and water facilities, flood lights, landing
lights, and all conveniences for flying, landing, and take-offs of aircraft of Lessee, which
use shall include the operation of a transportation system by Lessee's aircraft for the
carriage of persons, property, cargo, and mail, including without limitation, loading and
unloading of its aircraft, the right to load and unload persons, property, cargo, and mail at
the Airport by such automobiles, buses, trucks or other means of conveyances as Lessee
may require in the conduct of its business, and the right to install, maintain, use and
operate such radio, communications, meteorological and aerial navigation equipment and
facilities in, on, or about the Airport as may be deemed necessary by Lessee for its
operations provided same shall not interfere with Lessor's, or Federal Aviation
Administration's ("FAA"), existing or expanded equipment and facilities, as well as the
right, subject to Lessor's approval, to install advertising signs, and any other operation or
activity reasonably necessary to the conduct by Lessee of its air transportation service
business or training of its personnel, provided such other operation or activities will not
interfere with the use of the Airport by Lessor or its employees, agents, or other tenants
and such other operation or activities are used on the Airport. All worn, faded, damaged,
or outdated signs will be repaired or corrected by Lessee upon notice from the Director of
Aviation
B. Terminal Building.
1. Lessee shall be entitled to the use of the following leased premises in the
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terminal building:
a. Counter Space—210 square feet
b. Office Space —286 square feet
c. Outbound Baggage Space—660 square feet
d. Inbound Baggage Carousel (non-exclusive use)
2. The Lessor shall designate the specific areas to be used by Lessee.
Lessee's designated spaces are shown in Exhibit"A," attached hereto and
incorporated herein.
3. Indoor operation of gasoline-powered equipment is prohibited in the
terminal building, including the baggage and freight handling areas.
4. Areas will be designated for parking and storage of equipment, machinery,
and vehicles between flight times.
5. Employees of the Lessee shall park in designated parking areas while
working with the understanding that public parking is meant for the use of
passengers, guests, and patrons.
6. Lessee, its employees, passengers, guests, patrons, and invitees shall
have the use, in common with others, of any public space now available,
or which may hereafter become available, in the terminal building,
including, but not limited to, waiting rooms, restrooms, baggage collection
areas, and security.
C. Other.
1. Lessee shall have the non-exclusive right of ingress and egress, without
charge, to and from the premises outlined in Paragraph 1.6 above.
2. Lessee may purchase or otherwise obtain property, facilities, or services
deemed by Lessee to be required by, or incident to, its operations from any persons or
organizations it may choose, provided that such suppliers of materials and furnishers of
service have complied with the requirements of federal law and Section 3-1-2(c) of the
Pueblo Municipal Code to the extent applicable; and further provided, persons or
organizations furnishing charter aircraft services to Lessee in substitution of Lessee's
scheduled flights shall be exempt from the requirements of said Section 3-1-2(c).
3. The leased premises will be used for the regular business of a full service
air carrier. Any aircraft stored at the Airport must be continually registered with the FAA
throughout the life of this Lease and the tail numbers for same must be reported to Lessor.
Lessee agrees to report any changes in aircraft tail numbers to Lessor within fourteen (14)
days, in order for Lessor to comply with FAA reporting requirements.
4. This Lease and Lessee's use of the Airport are subject to the easements,
rights of way, covenants, conditions, restrictions, reservations, and limitations appearing
of record, and all applicable zoning and land use laws, ordinances, codes, and regulations,
including but not limited to all conditions, regulations, restrictions, and requirements
imposed by the FAA, governing and regulating the Airport and its uses.
5. Lessee, its officers, agents, and employees shall faithfully observe and
comply with all minimum standards and rules regulating operations and activities from and
upon the Airport adopted from time to time by Lessor. Such minimum standards and rules
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shall not be applied arbitrarily, discriminatorily, or unreasonably. If any provision of this
Lease shall conflict with any provision of the minimum standards or rules adopted or
amended by Lessor after commencement date, the conflicting provision of this Lease shall
control.
II. TERM.
A. The term of this Lease shall be for the period commencing January 15, 2023, and
ending January 31, 2025. Unless terminated earlier as provided herein, this Lease
shall expire and terminate at the end of the term and Lessee shall have no further
right or interest in the leased premises, except that upon early termination of this
Lease for any reason, Lessee shall have the right for a period of ten days after the
date of termination, to remove any or all of its personal property from the Airport,
provided, however, that Lessee shall not be in default in its payments to the Lessor
hereunder and Lessee shall repair all damage to the Airport caused by such
removal.
B. Should Lessee holdover the use of or continue to occupy the leased premises after
the expiration or termination of this Lease, such holding over shall be deemed
merely a tenancy for successive monthly terms upon the same terms and
conditions as provided in this Lease, subject to termination upon thirty (30) days
prior written notice. Lessee shall continue to pay rent without an express written
agreement as to such holding over, except that, the monthly rent will become equal
to one hundred twenty-five percent (125%) of the rent for the last month payable
hereunder.
C. Notwithstanding the foregoing, should the Federal Department of Transportation
("DOT") mandate a hold and that Lessee continue to provide services at the Airport
past the Lease termination date, the term of this Lease will be automatically
extended to the end of the federally mandated hold period upon the same terms
and conditions of this Lease and without an increase in rent for said period.
III. RENTALS AND FEES.
A. Lessee shall pay to Lessor monthly as rent for the leased premises and use of the
Airport covered by this Lease, $1,630.00 per month. The total yearly rent for the
leased premises and use of the Airport is $19,560.00.
B. The rents shall be increased biennially based upon the consumer price index for
all urban consumers, CPI-U (all items 1982-1984=100) or comparable index if the
Department of Labor changes or modifies the CPI-U or no longer publishes the
CPI-U. The rents shall be increased by a percentage equal to the percentage
increase in the CPI-U during each preceding two-year period over the comparable
CPI-U for the first month of each 2-year period. If there is no percentage increase
in the CPI-U for any preceding 2-year period, the rents will remain the same as the
preceding 2-year period for the next 2-year period. In no event, shall the
percentage increase for the rents be greater than five percent (5%) for any 2-year
period.
C. The Lessee hereby agrees to pay when due all rent, fees, and charges imposed
by the Lessor for the use and operation of the Airport. The fees and charges
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include, but are not limited to, landing fees, permit fees, security charges, and
administrative or service fees.
D. Rents shall be paid monthly without notice, offset, or deduction on or before the
tenth (10th) of the month, and fees shall be paid monthly without notice, offset, or
deduction on or before the tenth (10th) of the following month, at the City of Pueblo
Director of Aviation's office and shall be accompanied with such reporting forms
as the Director of Finance shall determine. Rent not paid by the tenth (10th) of the
month shall accrue a late fee of eight percent (8%) per month. Lessor shall have
the right to examine and audit Lessee's and its subtenant's books and records to
determine the accuracy of the numbers of gallons sold and the revenues derived
by Lessee, fees, and their calculation.
E. Should Lessee reach 10,000 enplanements at the Airport through regularly
scheduled services and charter flights within the federal fiscal year, and such
enplanements qualify the Lessor as a Primary Service Airport with the FAA and
Lessor receives at least $1,000,000.00 from the FAA as its federal apportionment
because of such status, Lessee shall not have to pay the rent set forth in Section
IIIA from January 1, 2024 through October 31, 2024. Rent shall only be waived
for the stated months.
F. Lessee agrees to pay the standard rate for all flights of the Lessee that land at the
Airport, to include any flight that is diverted to the Airport by the Lessee, provided,
however, that no fee shall be due and payable in the event an aircraft departs from
the Airport to return and land at the Airport because of meteorological conditions,
mechanical or operating causes, or for any similar emergency or precautionary
reason. The standard rate is currently set at $1.00 per maximum landing weight
("MLW') over 25,000 pounds for non-signatory landing fees. The standard rate
may be updated by Lessor periodically in accordance with FAA regulations and
municipal ordinance.
G. Within five (5) days following the end of each calendar month, the Lessee shall
transmit to the Director of Aviation a true and accurate report, giving data
necessary to calculate the amount of standard rate fees. Data for training flights at
Pueblo is to be included. Lessee agrees to pay standard rate fees monthly within
thirty (30) days of date of statements from Lessor.
IV. USE OF AIRPORT AND LEASED PREMISES.
A. The Airport and leased premises shall be used and occupied by Lessee as a full
service air carrier. The terminal areas shall be used for Lessee's business, flight
preparation, and other incidental office work. The leased premises shall not be
used for the storage of non-aeronautical personal property, living
accommodations, or in any other way inconsistent with this Lease. Failure to abide
by this provision shall constitute a material breach of this Lease.
B. Lessee shall not park or leave, or allow to be parked or left, aircraft on the taxiways
or on pavement in a manner which interferes with or obstructs access to adjacent
hangars or public areas. Parking of automobiles will be permitted only in
designated spaces outside of the airport fence. Nothing in this agreement provides
exclusive access to the entrance and exit gates into and out of the Airport to
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Lessee.
C. Lessee, its employees, and invitees shall have the right of ingress and egress
between designated Airport access points and areas of use over, upon, and
through such streets and not others as from time to time shall be designated by
the Director of Aviation. Driveways from existing streets into the areas of use shall
be located as designated by the Lessor through the Director of Aviation.
D. On the Effective Date, as later defined, and annually thereafter, Lessee shall
provide Lessor with a list of the Airport areas and any Airport tenants it intends to
access when providing services. Lessee shall keep this list current and report any
changes to the Lessor upon such change being made.
E. Lessee shall not have exclusive use of any area of the Airport or of any Lessor
equipment, unless Lessee contracts with Lessor for such use, and all such uses
shall be as determined by the Director of Aviation in his or her sole discretion. All
areas of the Airport and all Airport equipment will be inspected by Airport staff prior
to use by Lessee, and Lessee shall be required to sign-off on Airport staff's
inspection prior to said use.
F. Lessee shall use the common ramp area in compliance with Lessor's ground traffic
and aircraft parking plans and regulations, which will reasonably accommodate
Lessee's current and future use for the purposes set forth in this Lease.
V. MAINTENANCE OF AIRPORT.
A. Lessor shall provide all maintenance services required to keep in good repair the
Airport terminal building and all appurtenances, facilities, and services now or
thereafter connected with the foregoing, and shall operate the Airport in a manner
at least equal to the standards or ratings of Airports of similar size and character
issued by the FAA. Lessor shall maintain the premises leased hereunder for
Lessee's use in a good condition and shall provide maintenance necessary to
accomplish that end. Lessor reserves the right, but shall not be obligated to
Lessee, to maintain and keep in repair the landing area of the Airport and all
publicly owned facilities of the Airport, together with the right to direct and control
all activities of Lessee in this regard. Notwithstanding the foregoing, Lessee shall
be responsible for repairing any damage to the Airport or its facilities caused by it
or its agents, employees, or invitees other than that due to normal wear and tear.
If Lessor fails to make such repairs or if Lessor shall be in default in the
performance of any provision of this Lease, such failures or default shall not give
rise to any action or claim by Lessee or its agents, employees, or invitees against
Lessor. Lessee's only remedy for such failure or breach is to terminate this Lease.
B. Lessee shall, at its own expense, keep the leased premises neat, clean, safe, and
orderly at all times, free of waste, rubbish, and debris, and shall provide a complete
and proper arrangement for the sanitary handling and disposal of all trash,
garbage, and other refuse resulting from Lessee's activities at the Airport. No
outside storage of parts, materials, equipment, inventory, or other materials shall
be permitted.
C. All maintenance associated with Lessee's services and its enplanements and
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deplanements shall be the responsibility of Lessee. Lessee shall be responsible
for snow and ice removal from the doors of its airplanes to the airport terminal
building. Lessor will not provide ice melt, shovels, or other equipment, but Lessee
may store such equipment in the outbound baggage space.
VI. UTILITY COSTS.
Lessor shall be responsible for all utilities supplied to the leased premises and Airport.
Additions, deletions, or adjustments to utilities extended to the areas used by Lessee shall
not be made without prior written approval from the Director of Aviation. Costs for utilities
shall be incorporated within stated rent amounts.
VII. RIGHT OF INSPECTION.
The Lessor reserves and retains for its officers, employees, and authorized
representatives the right to enter the leased premises and any other area of the Airport
during reasonable business hours, and after prior notice, for the purpose of inspecting and
protecting the leased premises and Airport and for doing any and all things which the
Lessor may deem necessary for the proper general conduct and operation of the Airport
and in the exercise of the Lessor's police power.
VIII. IMPROVEMENTS BY LESSEE.
A. Lessee, at its own expense, may construct, install, alter, modify, repair, and
maintain in or on any space which is or may be leased by Lessee hereunder and
described in Paragraph I.B, any improvements that it shall determine to be
necessary for use in connection with its business. No restrictions shall be placed
upon Lessee as to the architects, contractors, or materialmen who may be
employed by it in connection therewith, who shall have free ingress and egress
from said premises. Notwithstanding the foregoing, no improvement to or
modification of the leased premises shall be made by Lessee until plans and
specifications therefore have been first approved by Lessor, which approval shall
not be unreasonably withheld, and provided the construction and installation of
such improvement to or modifications of the leased premises shall be in
compliance with all applicable laws and codes and shall not unreasonably interfere
with Lessor's operation of the Airport or terminal building or other lessees' use
thereof. Lessee shall ensure no liens are placed on Lessor's property for such work
and shall defend and indemnify Lessor from the same.
B. All structures and improvements constructed or erected hereunder by Lessee,
excluding movable trade fixtures, shall constitute a part of the leased premises and
Airport and therefore such structures and improvements cannot be removed from
the land. Fee simple title to the structures and improvements shall vest with Lessor
immediately upon completion of construction of same, free of all liens and
encumbrances. Notwithstanding that title is in or vests in Lessor, Lessor shall not
be responsible for any defects in the structures and improvements and shall have
no obligation or responsibility to maintain, repair, or restore the same; all such
obligation and responsibility shall be that of Lessee.
IX. TAXES, LICENSES, AND LIENS.
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A. Lessee covenants and agrees to pay promptly when due all taxes, fees, licenses,
and other governmental charges of whatever nature assessed against or
applicable to Lessee and the leased premises, or to Lessee's property and
operations thereon. Possessory interest tax is assessed by the County of Pueblo
and is the responsibility of the Lessee. The Lessor is a tax-exempt entity and shall
not be liable for any tax of the Lessee. All applicable taxes and costs shall be paid
by Lessee, even if Lessee was unaware of such taxes and costs.
B. At all times during the term of this Lease, and of any renewal or extension hereof,
Lessee shall, at its own cost and expense, provide and keep in good standing
business licenses with the City of Pueblo and the State of Colorado. Lessee shall
obtain and maintain any other licenses or certifications required by law, including
those required by the FAA. Upon request, Lessee will provide Lessor with
certificates of good standing evidencing that all licenses or certifications are current
and not subject to discipline.
C. Lessee covenants and agrees not to permit any mechanic's or material man's lien
to be filed against the leased premises, Airport, or any part or parcel thereof by
reason of any work or labor performed or materials furnished by any contractor,
subcontractor, mechanic, or material man. Lessee further covenants and agrees
to pay promptly when due all bills, debts and obligations incurred by it in connection
with its operations on the Airport, and not to permit the same to become delinquent
and to suffer no lien, mortgage, judgment, or execution to be filed against the
leased premises and Airport without the Lessor's prior consent which will not be
unreasonably withheld, except that in no instance will the lien, mortgage,judgment,
or execution be in any way an impairment of the rights of Lessor.
D. Lessees performing services using Airport Operations Areas ("AOA") must
annually undergo American Association of Airport Executives ("AAAE") Airport
News Training Network ("ANTN") Digicast Signatory Training and hold a current
signatory certificate that must be filed yearly with Airport Administration. Such
Lessees shall keep a record of all documentation related to badging and produce
it upon request.
X. LIABILITY AND INSURANCE.
A. Lessee agrees to indemnify, defend, and save and keep Lessor, its officers, agents
and employees, harmless from any and all loss, expense, including reasonable
attorney fees, claims, demands, or liability, resulting from the use of the Airport,
terminal building, Lessee's designated space, and all other Airport facilities, by
Lessee or any of its employees, agents, licensees, or invitees in their use and
occupancy thereof. Lessee assumes all risk of loss, damage, injury, and liability
for the same that may occur to Lessee, Lessee's guests, Lessee's aircraft and
Lessee's improvements and property in or upon the leased premises, terminal
building, and other facilities and Lessor shall not be liable or responsible for any
such loss, damage, or injury, regardless of the cause thereof.
B. Lessee shall obtain and maintain in effect, at Lessee's expense, during the term of
this Lease,Aircraft Liability Insurance covering both owned and non-owned aircraft
with coverage for both aircraft passengers and non-passengers. The Aircraft
Liability Insurance shall be written with a combined single limit for bodily injury and
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property damage of$5,000,000.00 per occurrence and $10,000,000.00 aggregate.
C. Lessee shall also obtain and maintain in effect at Lessee's expense, during the
term of this Lease, Airport Liability Insurance, covering the premises operations of
Lessee, including operation of mobile equipment, with a combined single limit of
not less than $25,000,000.00 for bodily injury and property damage, and such
insurance shall include Products & Completed Operations, Contractual Legal
Liability, and Personal Injury Legal Liability. The policy shall apply to liability
assumed by the Lessee under this Lease, and this Lease shall be deemed to be
an "Airport Contract" required by Lessor as a governmental authority as a
prerequisite for the use of the Airport, the terminal building, and Lessee's
designated space.
D. At all times during the term of this Lease, and any renewal or extension hereof,
Lessee shall, at its own cost and expense, provide, and keep in force commercial
automobile liability insurance with a combined single limit for all owned, hired, and
non-owned autos of not less than one million dollars ($1,000,000.00).
E. Lessee shall obtain and maintain in force, at Lessee's expense, during the term of
this Lease, Pollution Liability Insurance covering its liability for bodily injury,
property damage, and environmental damage resulting from sudden and
accidental releases of pollution, and covering related or resultant characterization,
cleanup and/or remediation costs arising from the occupancy and use of the
Airport, terminal building, and designated space. Combined single limit bodily
injury, property damage, environmental liability and cleanup/remediation shall not
be less than $1,000,000.00 in the annual aggregate.
F. Lessee shall obtain and maintain Workers' Compensation and Employer's Liability
coverage protecting Lessee against all claims under applicable State Workers
Compensation laws. This coverage shall include all of Lessee's employees,
including the owner(s), and shall contain an endorsement waiving subrogation
against the City of Pueblo.
G. Prior to the effective date of this Lease, Lessee shall furnish Lessor with a
certificate of insurance executed by a duly authorized representative of each
insurer, showing compliance with the insurance requirements shown above.
H. Coverage and limits enumerated in this lease insurance provision represent only
the minimum insurance required by the City of Pueblo, and Lessee should rely on
its own expertise to obtain any additional insurance coverage needed to protect
the City of Pueblo and the Lessee under this lease agreement and meet or exceed
industry standards.
In the event the premises covered by this Lease are wholly or partially destroyed
or damaged so as to render the whole or a substantial part thereof unfit for
occupancy, and the same cannot be repaired with reasonable diligence within one
hundred twenty (120) days after the happening of such destruction or damage, or
if Lessor, in its sole judgment determines that it is not economically feasible to
repair same, then this Lease, at the option of the Lessor, shall cease and terminate
as of the date of such damage or destruction. Upon such termination, Lessor shall
repay to Lessee any rents theretofore paid by Lessee with respect to any period
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after the date of such termination. Lessee shall surrender possession of the
premises to the Lessor upon such termination. If, in the sole opinion of Lessor,
such destruction or damage can be repaired within one hundred twenty (120)days,
Lessor shall forthwith repair the same with all reasonable diligence, and this Lease
shall continue in force and effect. During the period of such repair, the rent shall
be abated in the same ratio as that portion of the premises which is rendered unfit
for occupancy bears to the whole.
Xl. CANCELLATION BY LESSOR.
Lessor, in addition to other rights of termination or cancellation given herein or by law, may
cancel this Lease and terminate all or any of its obligations hereunder by giving Lessee
thirty (30) days advanced written notice, upon or after the happening of any one of the
following events:
A. The filing of Lessee of a voluntary petition in bankruptcy.
B. The adjudication of Lessee as bankrupt pursuant to such proceeding.
C. The appointment of a receiver of Lessee's assets or the divestiture of Lessee's
estate herein by operation of law.
D. The abandonment by Lessee of its conduct of air transportation service at the
Airport.
E. The default by Lessee in the performance of any covenant or agreement herein
required to be performed by Lessee and the failure by Lessee to remedy such
default for a period of thirty (30) days after receipt from Lessor of written notice to
remedy the same; provided, however, that no notice of cancellation, as above
provided, shall be of any force or effect if Lessee shall have remedied the default
prior to receipt of Lessor's notice of cancellation.
F. Recapture of the Airport by the federal government and assumption of control over
aviation activities at the Airport by the federal government for a period of more than
thirty (30) days.
G. Issuance by any court of competent jurisdiction of any injunction in any way
preventing or restraining the use of the Airport or any part thereof for airport
purposes, and such injunction remaining in force for a period of at least thirty (30)
days.
XII. CANCELLATION BY LESSEE.
Lessee, in addition to any other rights of termination or cancellation given herein or by law,
may cancel this Lease and terminate all or any of its obligations hereunder at any time
that Lessee is not in default in its payments to Lessor by giving Lessor thirty (30) days
advance written notice upon or after the happening of any one of the following events:
A. The order or the action of the Federal Department of Transportation or other
governmental authority terminating, suspending, or relieving Lessee's right or
obligation to operate.
Page 9 of 19
B. Issuance by any court of competent jurisdiction of any injunction in any way
preventing or restraining the use of the Airport or any part thereof for airport
purposes, and such injunction remaining in force for a period of at least thirty (30)
days.
C. Any action by the federal government or it's agencies refusing to permit Lessee to
operate into, from, or through the Airport such aircraft as Lessee may reasonably
desire to operate thereon, if such action prevents Lessee from providing essential
air services to Pueblo.
D. The inability of Lessee to use leased premises and facilities continuously for a
period of longer than thirty (30) days due to any deficiency of the Airport or unsafe
condition for operating at the Airport of the type of aircraft then being flown by
Lessee or any law, order, rule, or regulation of any appropriate governmental
authority having jurisdiction over the operations of Lessee, or due to war or other
casualty.
E. The assumption by the United States Government or any authorized agency
thereof of control of said Airport and facilities or any substantial parts thereof.
F. The erection of any obstacle on or near the Airport which would occasion a
modification of Lessee's air carrier operating certificate or similar authorization
establishing minimum safety standards for the operation of Lessee.
G. Unless the Federal Department of Transportation mandates a hold and that
Lessee must continue to provide services at the Airport, at the expiration or
termination of any Essential Air Service Contract("EAS Contract") between Lessee
and the United States Department of Transportation ("DOT") or any governmental
agency succeeding to the jurisdiction of the DOT, under which EAS Contract
Lessee has or had agreed to provide Essential Air Services to The City of Pueblo,
Colorado.
XIII. ASSIGNMENT.
Lessee may not assign or sublease the premises leased hereunder without the prior
written consent of Lessor, which may be granted or denied in its sole and absolute
discretion, except an assignment to a successor corporation which has merged with, or
acquired substantially all the assets of the Lessee, if such successor corporation provides
sufficient financial statements and records to Lessor demonstrating its financial ability to
perform this Lease and specifically agrees in writing to perform this Lease. Any
assignment made hereunder may be conditioned upon the payment of an assignment fee
to be determined by the Lessor and/or an increase in rent.
XIV. APPLICATION OF PUEBLO MUNICIPAL CODE.
All terms and conditions of this Lease are hereby made subject to the provisions of the
Pueblo Municipal Code, including but not limited to Title III, Chapter 1 thereof, and in event
of conflict between said Pueblo Municipal Code and any provision herein, said Pueblo
Municipal Code shall control.
Page 10 of 19
XV. REGULATION.
A. Lessee agrees to observe and obey all reasonable regulations imposed by Lessor
during the term hereof, provided the same are consistent with safety and do not
conflict with the regulations and procedures prescribed by the FAA for operation
of Lessee's aircraft at the Airport.
B. This Lease is subject to prior FAA approval.
XVI. NOTICES.
Notices to Lessor provided for herein shall be sufficient if served personally or sent by
certified mail, return receipt requested, addressed to: Director of Aviation, Pueblo
Memorial Airport, 31201 Bryan Circle, Suite 200, Pueblo, Colorado 81001; and notices to
Lessee, if sent by certified mail, return receipt requested, addressed to: Southern Airways
Express, LLC, 2875 South Ocean Boulevard, Suite 201, Palm Beach, Florida 33480; or to
such other respective addresses as the parties may designate to each other in writing
from time to time.
XVII. INVALID PROVISION; SEVERABILITY.
It is further expressly understood and agreed by and between the parties hereto that in
the event that any covenant, condition, or provision herein contained is held to be invalid
by any court of competent jurisdiction, the invalidity of any such covenant, condition, or
provision shall in no way affect any other covenant, condition, or provision herein
contained, provided, however, that the invalidity of any such covenant, condition or
provision does not materially prejudice either the Lessee or the Lessor in their respective
rights and obligations contained in the valid covenants, conditions, or provisions in this
Lease.
XVIII. SECURITY.
Lessee shall comply with and be responsible for all applicable: (1) FAA Regulations; (2)
Transportation Security Administration ("TSA") Regulations; (3) City Ordinances; and (4)
Airport Rules and Regulations; involving all of their leased area and use of the Airport and
terminal building, including TSAR Part 1540, Lessor's FAA approved Airport Security
Program, and all other Department of Transportation and FAA directives pertaining to
airport security.
A. The Airport participates in the Record of Arrest and Prosecutions Back ("RAP
Back") program for Sterile Area and Restricted Area badged individuals. RAP
Back provides an additional element to the background checks required of anyone
who is authorized to have unescorted access to secured areas of the Airport. Upon
notification to the Lessee, the airline will notify the Airport Security Coordinator
("ASC") within twenty four(24) hours of a disqualifying conviction as outlined in the
Sterile Area and Restricted Area Badge applications. Any badge suspension or
revocation will follow TSA regulations regarding disqualifiers outlined in the Code
of Federal Regulations ("CFR"). In cases where a person's access is suspended
while a disposition is being determined, the badge holder cannot be allowed or
escorted into a secured or Air Operations Areas ("AOA").
Page 11 of 19
B. Lost or stolen badges or Airport issued keys must be reported to the ASC within
two (2) hours of being discovered as missing or stolen.
C. Firing or suspension of a Lessee's employee will require a notification to the ASC
within two (2) hours and a subsequent return of any issued access media to the
Lessor.
D. Employees on leave for over fourteen (14) days must return issued access media
to the Lessor.
E. In the event that keys issued by the Lessor are lost, stolen, or otherwise
compromised, the Lessee will assume financial responsibility of the fees
associated with rekeying or re-coring.
XIX. CONDUCT OF BUSINESS.
Lessee agrees to operate for the use and benefit of the public and that in the operation of
its business upon the leased premises, Lessee agrees to furnish good, prompt, and
efficient services adequate to meet all the demands for its services at the Airport, including:
(i) a phone number available to customers; (ii) providing staff to provide local in-person
customer service; and (iii) providing a baggage pick up policy consistent with US DOT,
TSA, and contracts of carriage that does not include utilizing City of Pueblo employees to
achieve such means.
XX. NON-DISCRIMINATION; AFFIRMATIVE ACTION.
A. The Lessee will not discriminate or permit discrimination against any persons or
class of persons by reason of race, color, religion, sex, sexual orientation,
disability, or national origin in any manner prohibited by 49 CFR Part 21 of the
Regulations of the Office of the Secretary of Transportation, or any amendments
thereto. The Lessor reserves the right to take such action as the United States
Government may direct to enforce this covenant.
B. Lessee agrees to operate and provide services for the use and benefit of the public
and to furnish good, prompt, and efficient services adequate to meet all the
demands for its services at the Airport, to furnish service on a fair, equal, and not
unjustly discriminatory basis to all users thereof, and to charge fair, reasonable,
and not unjustly discriminatory prices for each unit of service, provided that Lessee
may be allowed to make reasonable and nondiscriminatory discounts, rebates, or
other similar types of price reductions to volume purchasers.
C. The Lessee assures that it will undertake an Affirmative Action Plan as required by
14 CFR Part 152, Subpart E, as amended, to ensure that no person shall, on the
grounds of race, creed, color, sex, sexual orientation, disability, or national origin,
be excluded from participating in any employment activities covered in 14 CFR
Part 152, Subpart E. The Lessee assures that no person shall be excluded on
these grounds from participating in or receiving the services or benefits of any
program or activity covered by such Subpart. The Lessee assures that it will
require that its covered sub-organizations provide assurances to the Lessor that
they similarly will undertake an Affirmative Action Plan and that they will require
assurances from the suborganizations as required by 14 CFR Part 152, Subpart
Page 12 of 19
E, as amended, to the same effect.
XXI. ENVIRONMENTAL PROVISIONS.
A. For the purpose of this Lease, "Hazardous Materials" means any hazardous or
toxic substance, material or waste which is or becomes regulated by any local
government authority, the State of Colorado, or the United States government and
shall include, but not be limited to: (i) substances defined as "hazardous waste,"
"restricted hazardous waste," "hazardous substance" or "hazardous material"
under any applicable federal, state, or local law or regulation (Environmental
Regulations); (ii) asbestos-containing materials; (iii) PCBs; (iv) petroleum or
petroleum based products; and (v) lead.
B. Lessee will comply with Environmental Regulations that are applicable to Lessee
and its use of the leased premises and Airport. No activity shall be undertaken by
Lessee, its guests, employees, agents, contractors, or subcontractors, on all or
any portion of the leased premises and Airport which would cause or permit: (i)the
presence, use, generation, release, discharge, storage or disposal of any
Hazardous Material in, on, under, about, or from the leased premises and Airport
or any part thereof in violation of any Environmental Regulations; (ii) any portion
of the leased premises and Airport to become a hazardous waste treatment,
storage or disposal facility without receiving proper governmental authorization,
and in compliance with all Environmental Regulations; or (iii) the discharge of
pollutants or effluents into any water source or system, or the discharge into the
air of any emissions without receiving proper governmental authorization, and in
compliance with all Environmental Regulations, including, without limitation, the
Federal Water Pollution Control Act, U.S.C. Section 1251 et seq. and the Clean
Air Act, 42 U.S.C. Section 7401 et seq.
C. Except to the extent Lessor is covered by an insurance policy, Lessee agrees to
defend, indemnify, and forever hold harmless Lessor, and its officers, employees,
agents, successors, and assigns, from all claims, losses, damages, penalties,
expenses and costs, including, but not limited to, attorneys' fees,
characterization, remediation and cleanup costs, incurred by reason of the use,
storage, generation, release, discharge, maintenance, disposal, or removal of
Hazardous Materials in, on, under, about, or from the leased premises and
Airport, or any part thereof, by Lessee, its employees, agents, guests,
contractors and subcontractors.
XXII. NON-EXCLUSIVE RIGHT.
All rights not herein granted to the Lessee are reserved to Lessor and nothing herein
contained shall be construed to grant or authorize the granting of an exclusive right within
the meaning of Section 308 of the Federal Aviation Act of 1958 as amended. It is clearly
understood by the Lessee that no right or privilege has been granted which would prevent
any person, firm, or corporation operating aircraft on the Airport from performing any
services, including but not limited to maintenance and repair, that it may choose to
perform.
)(XIII. DEVELOPMENT OF AIRPORT.
Page 13 of 19
Lessee recognizes that from time to time it will be necessary for the Lessor to initiate and
carry forward programs of construction, reconstruction, expansion, relocation,
maintenance, and repair at and to the Airport in order that the Airport and its facilities may
be suitable for the volume and character of air traffic and flight activity which will require
accommodation, and that such construction, reconstruction, expansion, relocation,
maintenance, and repair may inconvenience or interrupt Lessee's operations at the
Airport. Lessee agrees that no liability shall attach to Lessor, its officers, agents,
employees, contractors, subcontractors, and representatives by reason of such
inconvenience or interruption, and for and in further consideration of the premises, Lessee
waives any right to claim damages or other consideration therefore, provided, however,
that this waiver shall not extend to, or be construed to be a waiver of, any claim for physical
damage to property resulting from willful misconduct of the Lessor, its officers, agents,
employees, contractors, subcontractors, and representatives. The Lessee shall be
obligated to be pay all rent and fulfill all obligations of this Lease at all times, including, but
not limited to, when access to the Airport is temporarily restricted due to routine
construction, reconstruction, expansion, or other potential alteration of the airfield.
XXIV. FORCE MAJEURE; NATIONAL EMERGENCIES.
A. Any delays in or failure of performance by any party of its obligations under this
Lease shall be excused if such delays or failure are a result of acts of God, fires,
floods, storms, lightning strikes, labor strikes, labor disputes, accidents,
pandemics, regulations or orders of civil or military authorities, shortages of labor
or materials, or other causes, similar or dissimilar, which are beyond the control of
such party.
B. During a time of war or national emergency, Lessor shall have the right to lease
the landing area or any part thereof to the United States Government for military
use, and if such lease is executed, the provisions of this Lease insofar as they are
inconsistent with the provisions of the lease to the Government, shall be
suspended.
XXV. AERIAL APPROACHES.
By accepting this Lease, Lessee expressly agrees for itself, its successors, and assigns
that it will not erect nor permit the erection of any structure, building, or object nor permit
the growth of any tree on the Airport to a height not to exceed twenty-five (25) feet above
ground level. In the event the aforesaid covenant is breached, the Lessor reserves the
right to enter upon the property and to remove the offending structure or object and cut
the offending tree, all of which shall be at the expense of the Lessee. Lessor reserves the
right to take any action it considers necessary to protect the aerial approaches of the
Airport against obstruction, together with the right to prevent Lessee from erecting, or
permitting to be erected, any building or any other structure on or adjacent to the Airport
which, in the opinion of the Lessor, would limit the usefulness of the Airport or constitute
a hazard to aircraft.
XXVI. UNITED STATES.
This Lease is subject and subordinate to the terms, reservations, restrictions, provisions,
and conditions of the deed of conveyance from the United States Government to the
Lessor and to any other existing or future agreement between the Lessor and the United
Page 14 of 19
States, relative to the use, operation, or maintenance of the Pueblo Memorial Airport and
its appurtenant facilities, the execution of which has been or may be required as a
condition precedent to the participation by any federal agency in the extension,
expansions, or development of said Airport and its facilities.
XXVII. EFFECTIVE DATE.
Regardless of the date of execution, the effective date of this Lease is January 15, 2023
("Effective Date").
)(XVIII. FAA LEASE REQUIREMENTS.
A. The Lessor reserves the right, without any obligation on its part to do so, to
develop, modify, change, improve, or abandon the Pueblo Memorial Airport or any
part thereof, as it may determine in its sole discretion, at any time, regardless of
the desires or view of Lessee, and without interference or hindrance from Lessee
or liability to Lessee.
B. The Lessor reserves the right, without any obligation on its part to do so, to
maintain and keep in repair the landing area of the Airport and all publicly owned
facilities of the Airport, together with the right to direct and control all activities of
Lessee in this regard.
C. Lessor shall have full and unrestricted right to enter upon those portions of the
Airport occupied and leased herein by the Lessee, and Lessor, its agents, or
representatives shall be permitted to inspect same during any regular business
hours or upon twenty-four (24) hours' notice to Lessee.
D. Lessee shall comply with the notification and review requirements covered in Part
77 of the Federal Aviation Regulations with respect to the construction of any
structure or building on the Airport, or in the event of any planned modification or
alteration of any present or future building or structure on the Airport.
E. Lessor reserves for the use and benefit of the public, a right of flight for the passage
of aircraft in the airspace above the surface of the leased premises and Airport,
together with the right to cause in said airspace such noise as may be inherent in
the operation of aircraft now known or hereafter used for navigation or flight in said
airspace, and for use of said airspace for landing on, taking off from, or operations
on or over the Airport.
F. Lessee shall not make use of the Airport in any manner which might interfere with
the landing and taking off of aircraft at Airport or otherwise constitute a hazard to
aviation. In the event the aforesaid covenant is breached, the Lessor reserves the
right to enter upon any area and cause the abatement of such interference at the
expense of the Lessee.
G. Lessor reserves the right to grant and to take easements or rights of way in, under,
over, and across the Airport, in which event, Lessee shall only be entitled to
compensation for damages to improvements of the Lessee destroyed or damaged
thereby, but not to damages for loss of use of the leased premises and Airport.
Lessor will attempt to ensure such easements or rights of way will not impede,
Page 15 of 19
prohibit, or infringe upon Lessee's ability to carry out its authorized use of the
Airport, but makes no guarantees as to such.
H. Lessee agrees to annually complete and submit a Department of Transportation -
Federal Aviation Administration Airport Activity Survey (FAA Form 1800-31), as
may be amended, that documents Lessee's air taxi-commercial passenger
enplanements for each calendar year.
XXIX. MISCELLANEOUS.
A. This Lease expresses the entire understanding and agreement between the
Lessor and Lessee with respect to the subject matter hereof and shall be binding
and inure to the benefit of Lessor and Lessee and their respective successors and
approved assigns. No amendment or modification hereof shall be effective unless
in writing signed by Lessor or Lessee.
B. This Lease shall be governed by and construed in accordance with the laws of the
State of Colorado. Venue for any action arising out of this Lease shall be Pueblo
County, Colorado. Lessor and Lessee, to the extent permitted by law, waive trial
by jury in any action brought on or with respect to this Lease.
C. Lessee is leasing the leased premises and using the Airport "AS IS, WHERE IS,
WITH ALL FAULTS" in their present condition. Lessor makes no representation
or warranties of any kind or character, express or implied, with respect to the
leased premises and Airport, including but not limited to, any warranty or
representation as to suitability or fitness for a particular purpose, title, zoning,
physical or environment conditions, utilities, governmental approvals, the
compliance of the leased premises and Airport with governmental and environment
laws and regulations, the truth, accuracy or completeness of any document or
other information provided to Lessee by Lessor or any other person, or any other
matter or thing regarding the leased premises and Airport. Lessor shall be under
no obligation to maintain the leased premises and Airport or any part thereof in a
particular location or condition. If the Airport shall permanently close or relocate,
the use restrictions herein shall not apply, and the Lessee may use the leased
premises and Airport for any lawful use or purpose allowed by the then existing
Pueblo Municipal Code, or in the alternative, Lessee may terminate this Lease
upon thirty (30) days prior written notice given to Lessor.
D. The Lessee represents that it has inspected the Airport and facilities and accepts
the conditions of same and fully assumes the risk incident to the use thereof. The
Lessor shall not be liable to the Lessee for any damages or injuries to the property
or personnel of the Lessee which result from hidden, latent, or other dangerous
conditions on the Airport or leased premises. Lessee taking possession of the
leased premises and use of the Airport shall be conclusive evidence that Lessee
accepts the same in their present condition and that the leased premises and
Airport are in good and satisfactory condition at the time such possession was
taken.
E. The acts and omissions of Lessee's employees, agents, contractors, and guests
shall be imputed to Lessee for purposes of this Lease.
Page 16 of 19
F. No provision of this Lease may be waived except by an agreement signed by the
waiving party. A waiver of any term or provision shall not be construed as a waiver
of any other term or provision.
G. This Lease is expressly made subject to the limitations of the Colorado
Constitution. Nothing herein shall constitute, nor be deemed to constitute, the
creation of a debt or multi-year fiscal obligation or an obligation of future
appropriations by the City Council of Pueblo, contrary to Article X, §20 of the
Colorado Constitution or any other constitutional, statutory or charter debt
limitation. Notwithstanding any other provision of this Lease, with respect to any
financial obligation of Lessor which may arise under this Lease in any fiscal year,
in the event the budget or other means of appropriations for any such year fails to
provide funds in sufficient amounts to discharge such obligation, such failure shall
not constitute a default by or breach of this Lessor, including any sub-agreement,
attachment, schedule, or exhibit thereto, by the Lessor.
H. Nothing in this Lease is intended, nor should it be construed, to create or extend
any rights, claims or benefits or assume any liability for or on behalf of any third
party, or to waive any immunities or limitations otherwise conferred upon the City
of Pueblo, a Municipal Corporation under or by virtue of federal or state law,
including but not limited to the Colorado Governmental Immunity Act, C.R.S. §24-
10-101, et seq.
Each person signing this Lease on behalf of a party represents and warrants that
he or she has the requisite power and authority to enter into, execute, and deliver
this Lease on behalf of such party and that this Lease is a valid and legally binding
obligation of such party enforceable against it in accordance with its terms.
J. This Lease and all other documents contemplated hereunder may be executed
using electronic signatures with delivery via facsimile transmission, by scanning
and transmission of electronic files in Portable Document Format (PDF) or other
readily available file format, or by copy transmitted via email, or by other electronic
means and in one or more counterparts, each of which shall be: (i) an original, and
all of which taken together shall constitute one and the same agreement, (ii) a valid
and binding agreement and fully admissible under state and federal law, and (iii)
enforceable in accordance with its terms.
[Remainder of page intentionally left blank.]
Page 17 of 19
IN WITNESS WHEREOF, the parties have caused this Lease to be executed as of the day and
year first above written.
[ SEAL ] CITY OF PUEBLO, A MUNICIPAL CORPORATION
ATTEST: By
City Nicho as A. Gradisar, ayor
SOUTHERN AIRWAYS EXPRESS, LLC
ATTEST: By
Name ,
Title 'Jr' eM.J�
Page 18 of 19
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